scholarly journals Inflation dynamics in a dollarised economy: The case of Zimbabwe

2019 ◽  
Vol 20 (1) ◽  
pp. 94-117 ◽  
Author(s):  
W Kavila ◽  
P Le Roux
Keyword(s):  
South African ◽  
Money Supply ◽  
Inflation Rate ◽  
Inflation Dynamics ◽  
Local Currency ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
The Us ◽  
High Inflation ◽  
Main Determinants

This paper explores the dynamics of inflation in the dollarised Zimbabwean economy using the autoregressive distributed lag (ARDL) model with monthly data from 2009:1 to 2012:12. The main determinants of inflation were found to be the US dollar/South African rand exchange rate, international oil prices, lagged Zimbabwean inflation rate and South African inflation rate. During the local currency era, inflation dynamics in Zimbabwe were explained by excess growth in money supply, changes in import and administered prices, unit labour costs and output (Chhibber, Cottani, Firuzabadi & Walton 1989). According to Makochekanwa (2007), hyperinflation during the same era was attributed to excess money supply growth, lagged inflation and political factors. Coorey, Clausen, Funke, Munoz & Ould-Abdallah (2007) affirmed these findings by identifying excess money supply growth as a source of high inflation in Zimbabwe during the local currency era. In essence, the findings of this study point to a shift in inflation dynamics in Zimbabwe. This shift in inflation dynamics means that policies, which were used to respond to both internal and external shocks that have an impact on price formation, might not be applicable in a dollarised economy.

scholarly journals Other Determinants of Inflation in Nigeria

2020 ◽  
Vol 9 (2) ◽  
pp. 338-348
Author(s):  
Victor Inim ◽  
Udo Emmanuel Samuel ◽  
Abner Ishaku Prince
Keyword(s):  
Money Supply ◽  
Inflation Rate ◽  
Correction Model ◽  
Economic Growth And Development ◽  
Infrastructural Development ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Determining Factors ◽  
Short Run ◽  
Economic Reality

Inflation is a continuous macroeconomic concern that has dominated thoughts at major economic fora due to its pervasive effect on the economy. The quantity theory of money isolates money supply as the major cause of inflation. The economic reality in Nigeria contravenes the theory. The study examines other determinants of inflation in Nigeria using the autoregressive distributed lag (ARDL) method on quarterly data from January 1999- December 2018. Findings show that poor infrastructural development, exchange rate, political instability, corruption, and double taxation significantly stimulate inflation rather than just money supply. The results show a causal relationship between other determining factors and inflation. The ARDL result shows a significant long-short run relationship. The study recommends that non-monetary factors of instigating inflation should be controlled and security expenditure should be review along with-related mechanisms to achieve low inflation at single digits at most and economic growth and development. Keywords: inflation rate, money supply, Nigeria, economic indicators, ARDL Error Correction Model

scholarly journals Government Expenditure and Inflation in Nigeria

2020 ◽  
Vol 3 (2) ◽  
pp. p29
Author(s):  
Chioma Chidinma George-Anokwuru ◽  
Bosco Itoro Ekpenyong
Keyword(s):  
Money Supply ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Lag Model ◽  
The Impact

The impact of government spending on Nigeria’s inflation levels between 1999 and 2019 was x-rayed in this paper. The data for the study were sourced from CBN statistical bulletin and Autoregressive Distributed Lag model was used as the main analytical tool. A long-run relationship among this study’s variables was realized, using the ARDL Bounds test. The result also revealed a positive but insignificant relationship between government expenditure and inflation rate in the short-run. Moreover, in the long-run, government expenditure has negative and is statistically significant inflation rate. Money supply has a negative and is statistically insignificant with inflation rate in the short-run. In the long-run, money supply has a positive and significant relationship with inflation rate. Gross domestic product was negatively related to inflation rate in both short-run and long-run. Moreover, exchange rate affected inflation rate negatively and significantly in the short-run and positively and significantly in the long-run. The increasing demands of the population affected inflation rate positively and significantly in both short-run and long-run. Investment was positively related to inflation rate but not significant in the short-run but the relationship was negative and significant in the long-run. The study therefore recommended among others that government should exercise discretion in spending in order to check inflation rate. This can be done by channeling spending on productive activities that will cushion the effect of inflation rate rather than exacerbate it.

scholarly journals Dollarization in Sierra Leone: Evidence and Some Policy Options

2020 ◽  
Vol 7 (4) ◽  
pp. 160
Author(s):  
Abu Bakarr TARAWALIE ◽  
Amadu JALLOH
Keyword(s):  
Exchange Rate ◽  
Sierra Leone ◽  
Correction Term ◽  
Financial Deepening ◽  
Policy Makers ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Short Run ◽  
Key Policy ◽  
Main Determinants

This study aims to empirically investigate the determinants of dollarization in Sierra. It uses quarterly data from 1992Q1 to 2017Q4 and autoregressive distributed lag Bound Testing technique. Both the long and short run results revealed that inflation, exchange rate depreciation, financial deepening and war dummy were the main determinants of dollarization in Sierra Leone during the study period. The error correction term depicts that 53 percent of any disequilibrium in dollarization will be corrected within a year. A key policy recommendation is that policy makers should implement prudent policies that will ensure broader macroeconomic stability (including price stability and exchange rate stability) as a recipe for de-dollarization in Sierra Leone.

scholarly journals ANALISIS DETERMINASI INFLASI DI INDONESIA

2016 ◽  
Vol 12 (1) ◽  
pp. 89-96
Author(s):  
Ari Mulianta Ginting
Keyword(s):  
Money Supply ◽  
Inflation Rate ◽  
Secondary Data ◽  
Negative Influence ◽  
Community Needs ◽  
Goods And Services ◽  
Public Consumption ◽  
High Inflation ◽  
Macroeconomic Indicators ◽  
The Government

Inflation is one of the macroeconomic indicators of concern for the government. The high inflation rate could disrupt the economy. This study tried to analyze the factors that cause inflation in Indonesia. This study used a qualitative and quantitative approach using secondary data period 2004-2014. The results of the qualitative analysis showed that in the period 204-2014 inflation rate in Indonesia was fluctuated  While the results of the regression analysis VECM, indicating that the inflation rate in Indonesia is influenced by the variable of  exchange rate, money supply and level of consumption. While the GDP variable has a negative influence on inflation. In order to control the inflation rate the government could use macroeconomic variables such as exchange rates, the money supply well. Besides controlling public consumption at a good level and increase the production of goods and services to meet community needs.   Inflasi merupakan salah satu indikator ekonomi makro perhatian bagi pemerintah. Tingkat inflasi yang tinggi dapat mengganggu perekonomian. Penelitian ini mencoba untuk menganalisis faktor-faktor yang menyebabkan inflasi di Indonesia. Penelitian ini menggunakan pendekatan kualitatif dan kuantitatif dengan menggunakan periode data sekunder 2004-2014. Hasil analisis kualitatif menunjukkan bahwa tingkat inflasi periode 204-2014 di Indonesia berfluktuasi. Sementara hasil VECM menunjukkan bahwa tingkat inflasi di Indonesia dipengaruhi oleh variabel nilai tukar, uang beredar dan tingkat konsumsi. Sementara itu variabel GDP memiliki pengaruh negatif pada inflasi. Untuk mengendalikan tingkat inflasi pemerintah dapat menggunakan variabel ekonomi makro seperti nilai tukar, uang memasok baik. Selain mengendalikan konsumsi masyarakat pada tingkat yang baik dan meningkatkan produksi barang dan jasa untuk memenuhi kebutuhan masyarakat.

scholarly journals Determinants of Money Supply in Nigeria

2021 ◽  
pp. 181-199
Author(s):  
Aderopo R. Adediyan
Keyword(s):  
Money Supply ◽  
Financial Liberalization ◽  
Financial Sector ◽  
Money Multiplier ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Ardl Approach ◽  
Reserve Ratio

Studies on money supply determinants focus on the Classicists or Monetarists, Keynesians and post-Keynesians variables like income and money multiplier. This research extends the literature on money supply determinants to include the influence of financial liberalization on money supply with a reference to Nigeria between 1980 and 2019, using the Autoregressive Distributed Lag (ARDL) approach. Data used for the study were collected from the 2019 CBN Annual Statistical Bulletin. The study found that financial liberalization is an important factor in determining money supply in Nigeria, in addition to currency ratio, required reserve ratio and high-powered money. As a result, the extent of the liberalization of the financial sector matters in decisions on the regulation of money supply in the economy.

scholarly journals Impact of Public Capital Expenditure on Inflation Rate in Nigeria

2021 ◽  
Vol 2 (4) ◽  
pp. 30-39
Author(s):  
Jideofor Nnennaya Joy ◽  
Michah Chukwuemeka Okafor ◽  
Eke Onyekachi Abaa
Keyword(s):  
Unit Root ◽  
Inflation Rate ◽  
Capital Expenditure ◽  
Unit Root Test ◽  
Public Capital ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Mixed Order ◽  
Augmented Dickey Fuller ◽  
The Impact

This paper examines the impact of public capital expenditure on inflation rate in Nigeria. The data for the study were sourced from various issues of the Central Bank of Nigeria’s statistical bulletin. The data was subjected to unit root test using Augmented Dickey fuller (ADF) approach to ascertain the time series properties. Descriptive statistics was used to assess the socioeconomic characteristics of the variables. Due to the mixed order of integration witnessed in the unit root, ARDL- Autoregressive Distributed Lag approach was used for cointegration and regression analysis. The result found that Public capital expenditure is negatively and statistically significant (tcal = -2.903) in influencing Inflation Rate in Nigeria. This outcome is highly directional in the sense that prudent and productive spending will always subdue inflation in any economy; therefore, this study recommend that government should increase its investment in production sectors and encourage skilful and willing citizens to participate, since this would reduce the expenses being incurred on business as a result low currency value and raise the profitability of firms.

DO OIL PRICE FLUCTUATIONS AFFECT THE INFLATION RATE IN INDONESIA ASYMMETRICALLY?

2020 ◽  
pp. 1-21
Author(s):  
LIM THYE GOH ◽  
SIONG HOOK LAW ◽  
IRWAN TRINUGROHO
Keyword(s):  
Inflation Targeting ◽  
Inflation Rate ◽  
Oil Price ◽  
Production Costs ◽  
Price Reduction ◽  
Producer Price ◽  
Price Fluctuations ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run

Changes in the oil price directly affect production costs, and subsequently, the general price level of products. With Indonesia observing an inflation targeting policy, this study applies the nonlinear autoregressive distributed lag (NARDL) technique to investigate the effect of oil price fluctuations in Indonesia. The relationship is important for the central bank to gauge the effectiveness of the inflation targeting policy in immunizing the country from oil price fluctuations. Our findings have revealed that there was an asymmetric behavior between oil price and the inflation rate (producer price index), thus questioning the effectiveness of the inflation targeting policy. More specifically, in the long run, an increase in the oil price will tend to lead to an increase in the rate of inflation with a greater deviation, while an oil price reduction will lead to a decrease in the inflation rate with a lower deviation. This suggests that the benefits of an oil price reduction are not passed down to the consumer.

Factors determining bank deposit growth in Turkey: an empirical analysis

2020 ◽  
Vol 14 (2) ◽  
pp. 121-132
Author(s):  
Ibrahim Nandom Yakubu ◽  
Aziza Hashi Abokor
Keyword(s):  
Money Supply ◽  
Banking Sector ◽  
Empirical Studies ◽  
Key Factors ◽  
Macroeconomic Factors ◽  
Content Type ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

Purpose This paper aims to examine the key factors determining bank deposit growth in Turkey for the period 2000Q1–2016Q4. Design/methodology/approach The study employs the autoregressive distributed lag approach to investigate the effect of bank-level and macroeconomic factors on deposit growth. Findings The results reveal that bank stability, banking sector efficiency, broad money supply, economic growth, and inflation are significant determinants of deposit growth in the long run. The findings further show that in the short run, only branch expansion and broad money supply are relevant for bank deposit mobilization. Originality/value This paper departs from the extant empirical studies that focus on the determinants of individual savings behaviour in Turkey. Considering the short- and long-run time dimensions, the authors distinctively examine how bank characteristics influence deposit growth, thus presenting a relatively pioneering attempt in this context.

scholarly journals The Relationship between Money Supply, Price Level and Economic Growth In Pakistan: Keynesian versus Monetarist View

2018 ◽  
Vol 11 (2) ◽  
pp. 49-64
Author(s):  
Abdul Mansoor ◽  
Quratulain Shoukat ◽  
Shagufta Bibi ◽  
Khushbakht Iqbal ◽  
Romana Saeed ◽  
...  
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Price Level ◽  
Economic Policies ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Relationship ◽  
Supply Price

AbstractThe objective of the study is to examine the relationship between money supply, price level and economic growth in the context of Pakistan by using Autoregressive Distributed Lag (ARDL) model, covered a period of 1980 to 2016. The results confirm the long-run relationship between the variables while using broad money supply as a response variable. However, in the price and income modeling, the variables do not support the cointegration relationship between the variables. The causality results confirmed the unidirectional relationship running from income to money supply, which implies that income do causes money supply in the short run, whereas money supply leads to inflation to support Monetarist view of inflation in a country. The results conclude that economic growth is imperative to stabilize money supply and price level through sound economic policies in a country.

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